Reallocating SDRs into an IMF Global Resilience Trust

The reallocation of SDRs into the Poverty Reduction and Growth Trust (PRGT) is a channel that has already been used by several countries (see here and here), and the IMF has called on advanced countries to use some of their new SDRs to buttress the PRGT further. But many have pointed out that loans from the PRGT can only be used to support a prescribed list of low-income countries for a limited set of purposes. Thus, there have been calls for another IMF-based fund that can support a larger number of countries, particularly vulnerable middle-income countries (MICs), and can be used to provide financial flexibility as LMICs confront recovery from the pandemic and the transition to a resilient, sustainable, and equitable future global economy. This note considers the technical challenges of establishing such a fund, which we dub a Global Resilience Trust (GRT).